AIB chiefs braced for criticism over rogue trading

Senior executives at the American subsidiary of Allied Irish Banks will come under fire this week when the group releases the findings of an independent report on how a rogue trader, John Rusnak, was able to notch up $691m (£500m) of losses from irregular foreign exchange trades.

AIB's board will meet tomorrow to discuss the report, compiled by the prominent American banker, Eugene Ludwig, and handed to AIB's chairman Loclann Quinn on Saturday.

The bank may ask certain employees of AIB's Baltimore-based arm Allfirst Financial to resign on the back of the findings. It has already suspended some of the bankers working with Mr Rusnak.

Executives at Allfirst have said that they were unaware of the loss-making foreign trades Mr Rusnak was making over a period, which may have been as long as five years.

But AIB's Dublin-based board is expected to take a dim view of the defence in some cases, believing that senior figures should have been able to detect his alleged fraud.

AIB stunned the City last month when it warned of a potential multi-million pound hit from a "determined and complex" fraud within its foreign exchange trading unit.

But the bank won widespread respect when it immediately announced that the problem was to be independently investigated.

AIB's chief executive, Michael Buckley, is expected to escape censure in the report and he will not step down to take responsibility for the fiasco.